3 Ways Filers Underestimate Their Transportation Costs and Shortchange Themselves in Bankruptcy

Car repair expenses can be included as an expense on your bankruptcy budget

Image source: Flickr Creative Commons User Karen Green

The bankruptcy courts consider carefully (via the Trustee in your case) whether or not you can afford to pay your debts. If they find you have enough money to live on and pay your bills, you won't be able to get a Chapter 7 bankruptcy. In order for the court to be able to determine what you can afford, your attorney presents them with your budget of monthly income and expenses. It's critically important that you accurately reflect expenses, especially those that aren't controlled by set allowance figures as we wrote about earlier this week.

One of the areas that many bankruptcy filers often underestimate is their transportation costs. You may think about your car note and car insurance when you think about how much it costs to keep you on the road, and your gas costs, as well. But there are actually a number of other expenses associated with your vehicle that you need to carefully consider when preparing your budget that will go to the court and that can make or break your ability to receive a Chapter 7 discharge. Here are three transportation-related expenses that often go under-reported for bankruptcy budget purposes:

#1 Repairs

Is your car making a clunking sound? Is your check engine light on? Many consumers have issues with their vehicles that need repair but they've been putting it off, likely because of the same money problems that are leading them to file bankruptcy. But these are costs that need to be included because you need to spend the money and have the repair done or your car won't be drivable for much longer. These should all be listed on Schedule J that goes along with your petition.

#2 Maintenance

Regular maintenance is key to keeping your car on the road and you and your family safe. However, many of us neglect standard recommended maintenance (and we should not). This includes replacing tires as they need it instead of driving on balding tires, oil changes every 3,000 miles, brake jobs, hose replacement and all the little stuff you need to spend money on to keep your car in good running order.

#3 Accidents

Have you broken off one of your side view mirrors? Taken a piece of gravel to your windshield that left a crack? Backed up and made a huge dent in your door? Has your car antenna snapped off in the car wash? These accidents are likely too low-key to cause you to file an insurance claim because the deductible would be more than the repair and reporting it can cause your rates to go up, but these are still legitimate repairs that need to be made that will cost money.

All of these items should be included on Schedule J of your bankruptcy petition. Contact a reputable North Carolina bankruptcy attorney like the experts at the law offices of John T Orcutt. We offer a free consultation to new clients and will work hard to ensure you get the best results with your Chapter 7 or Chapter 13 filing. Contact us now!